EAST LANSING -- Michigan State University offered to pay East Lansing $10 million if the city agreed to pull an income tax proposal from its November ballot.

East Lansing declined the July 21 proposal and made a counter-offer: $100 million.

MSU's offer now stands at $20 million.

The proposals were included in a series of terse letters exchanged over the last few weeks between MSU President Lou Anna Simon and East Lansing Mayor Mark Meadows as they debated the city's contested income tax proposal.

Simon claimed students, young families and businesses would be impacted by the tax, but MSU employees would feel it most -- paying an estimated $4.9 million chunk of a tax prompted by East Lansing's "past financial mismanagement."

Meadows called Simon's suggestions of financial mismanagement "offensive and uninformed."

The letters -- released to media on Monday -- are the latest sign of the heated debate between MSU and the city regarding solutions to East Lansing’s growing problem with legacy costs.

In June, East Lansing City Council approved a November ballot proposal that, if passed by voters, would tax residents 1% of their income and non-residents who work in the city 0.5% of their income. The proposal also would lower property taxes from roughly 17 mills to a maximum of 13 mills.

The income tax was one of several recommendations following months of research by the East Lansing Financial Health Review Team, which was established to address the city’s nearly $200 million debt.

Besides the income tax recommendation, the team also commissioned a report that concluded MSU cost the city about $3.75 million in uncompensated public works, law enforcement and fire services in 2015. MSU currently pays about $326,000 a year for fire protection from East Lansing Fire Department.

MSU called that report “cherry-picked.” In June, Simon said the income tax proposal was reminiscent of “taxation without representation.”

The income tax is expected to generate about $10 million in annual revenue, which would result in an about $5 million gain after the property tax decrease is considered.

MSU officials have estimated 14,000 university employees, many of whom are student employees, would be impacted.

Letters sent between Simon and Meadows between July 21 and Monday reveal blunt behind-the-scenes negotiations to find a compromise.

In a July 21 letter, Simon proposed paying East Lansing a total of $10 million over the course of five years if the city council pulled a proposed income tax from the November ballot. Simon suggested she could propose the plan to the school’s Board of Trustees, though "some remain adamantly opposed to paying the city to remedy its past financial mismanagement."

Should the income tax pass, she said, MSU would "work aggressively" to educate students and employees on the tax "and options they may have to reduce it."

Meadows, in a letter dated four days later, called Simon’s assertions “offensive and uninformed” and made a counter offer.

Meadows proposed the city would withdraw the income tax proposal from the ballot if MSU agreed to pay $5 million per year for 20 years in quarterly installments.

Simon dismissed that offer.

“I cannot simply write a $5 million check for a 20-year period, committing $100 million of University assets,” Simon wrote July 27.

She in turn proposed $2 million per year for 10 years if the city pulled the income tax from the ballot.

About a week later, in an Aug. 4 letter to Meadows, Simon discussed another counter offer with varying payments over eight years for a total of $20 million.

Meadows, in an Aug. 7 letter, rejected Simon's offer, noting that the money would be offset by the city’s existing fire contract with MSU, meaning the payment would actually amount to $17.3 million.

Meadows suggested instead that the university pay $2 million to the city over 10 years for a total of $20 million. He said the city in turn would amend its proposed income tax to 0.5% for residents and 0.25% for non-residents, and would return some of MSU’s most recent $2 million payment if the city increased the income tax during that time period.

Meadows also requested the university "publicly support" the tax increase.

Simon, on August 10, clarified that it was her intention to supplement the fire contract with the $20 million offer, not replace it. She said Meadow's Aug. 7 offer asked for more than previously understood and was "a clear break with the way we have conducted our negotiations thus far."

In a letter dated Monday, Meadows stood by his Aug. 7 proposal. He noted proposed concessions, such as the elimination of the property tax reduction, cuts in the income tax amount and assurances that MSU’s contribution would be used for public safety costs.

“Quite simply, the offer you were provided accepted your concerns and justifications and was crafted to meet them,” Meadows wrote.

Jason Cody, a spokesman for the university, said Simon’s proposed offers were “fair” and show a vested interest in the community. He said the university is reviewing Meadows’ most recent letter.

East Lansing City Manager George Lahanas said the deadline to remove the income tax from the ballot is 4 p.m. Tuesday.

He said there currently are no plans for the city council to meet prior to its scheduled 7 p.m. meeting Tuesday.

In responding to Simon’s allegations of “financial mismanagement,” Lahanas pointed to years of staff reductions and a stagnant general fund, which went from $33.8 million in 2006 to $33.1 million in 2017.

“Over a decade we are actually negative in growth,” Lahanas said. “If that doesn’t put in perspective the difficulty the city is in…I don’t know what would.”